‘You lack management competence’
‘Your own leadership style is wrong’
‘The result is an unhappy ship’
‘You have an absolute duty to change the way you operate.’
The specifics were worse than the rebukes. In the paragraph about leadership style, the authors pulled no punches:
You break every rule of good man-management. You bully your weaker colleagues. You criticise colleagues in front of each other and in front of their officials. They can’t answer back without appearing disrespectful, in front of others, to a woman and to a Prime Minister. You abuse that situation.45
The blockbuster was right on these counts, but Margaret Thatcher did not immediately see it that way. ‘I got your letter. No one has ever written a letter like that to a Prime Minister before’, she hissed to Hoskyns in a moment of fury, believing him to be its principal author. In fact, it had been a genuine collaborative effort by the ‘Westwell Three’, as Margaret Thatcher crossly called the signatories. Her label derived from David Wolfson’s country house in Westwell, Oxfordshire, where the triumvirate had composed their memorandum.
Their message was most effective in its political recommendations. While praising her for launching ‘a near-revolution in the private sector’, it warned that an internal revolt ‘threatens your own position’. It also urged her to make a radical reconstruction of her cabinet, and to sack Peter Thorneycroft as Party Chairman. ‘You need a new Chairman, a younger man who is totally loyal to you, and you need him fast.’ The most devastating part of the blockbuster was its conclusion, which baldly stated that unless she accepted the authors’ advice she would soon be ousted, going into the history books only with the prize for being the ‘Best Loser’.46
Once her temper had cooled, Margaret Thatcher saw John Hoskyns and David Wolfson to discuss their criticisms of her. Although not himself present at this meeting, Alan Walters’ diary entry for Wednesday 26 August reported the essential outcome of it: ‘JH & DW saw PM until 11.30. She was very shaken – realises she has to change – V. tired and needed holiday. MUST (2) [make] bold and decisive move to fire Thorneycroft … Reshuffle being discussed.’47
Although she resented being hauled over the coals so brutally by insiders she considered as loyalists, Margaret Thatcher took their political advice seriously, for she followed their main recommendations on reshuffling the cabinet and changing the party chairmanship. As for their more personal suggestions, she was too angered by them to change her style of man-management. It remained her long-term Achilles heel. But in the short term, the men she needed to manage most carefully were away for the next few weeks. Their absences from the policy-making battlefield demonstrated the truth of an old parliamentary saying, ‘Nothing succeeds like recess’.
The summer recess of 1981 was a hot and happy one. The nation was entranced by the wedding of the Prince of Wales and Lady Diana Spencer at St Paul’s Cathedral on 29 July. The inner-city riots evaporated as mysteriously as they had started. The grandest and most troublesome Tory ministers dispersed to their country houses, grouse moors or villas in Tuscany. Politics and economics seemed to fall off the agenda. Even the holiday-averse Prime Minister eventually shut up shop to spend a few days in the cool of the Swiss Alps. She was biding her time and planning her revenge against her foes.
The cabinet that had so bad-temperedly split over public spending in July never met again with the same membership. The blockbuster memorandum persuaded Margaret Thatcher that she must reassert her authority by wielding her axe. So, on 14 September 1981, while Parliament was still in recess, she sacked three prominent figures from the cabinet, moved seven others and changed the party chairmanship. The net effect was to shift the balance of power in the government towards a more loyal group of ministers who supported her policies and philosophy.
The three dismissals – Mark Carlisle, Ian Gilmour and Lord Soames – she regarded as wets. Two of them did not go quietly. Immediately after his sacking, Gilmour strode out of No. 10 to tell the awaiting journalists that ‘It does no harm to throw the occasional man overboard, but it does not do much good if you are steering full speed ahead for the rocks.’48
Lord Soames, the hero of the Rhodesia crisis, Winston Churchill’s son-in-law, and a Tory grandee to the triggers of his Purdeys, let the Prime Minister have it with both barrels. In what must have been one of the angriest cabinet dismissal interviews of all time, Soames sent her private secretary out of the room and then opened fire. For twenty minutes he gave her a hard pounding for her mishandling of the civil-service strike and her rudeness to colleagues. Both charges were true. But she was impervious because she had come to dislike Soames with a personalised intensity. She retaliated in her memoirs by writing: ‘I got the distinct impression that he felt the natural order of things were being violated and that he was, in effect, being dismissed by his housemaid.’49
Another cabinet heavyweight was almost as upset as Soames – but for being moved to a less influential post. This was Jim Prior, the Employment Secretary. He wanted to stay at the centre of economic decision-making. She wanted to shift the arch wet away from it. So she offered Prior the job of Secretary of State for Northern Ireland. As he had been leaking to the press for weeks that he would never accept such a move, this folly caused him no little difficulty. After a couple of hours of hesitation, he realised that his bluff had been called. He knew he would look cowardly if he refused the place of honour and danger. But he did negotiate the retention of his seat on the ‘E’ committee – where he was to be consistently outmanoeuvred and outvoted. From that time on, Prior’s influence as a leading wet went into continuous decline.
The new arrivals in the cabinet were kindred political spirits who shared the Prime Minister’s convictions. Nigel Lawson, who had been hugely influential in the junior post of Financial Secretary to the Treasury, was given his own portfolio as Secretary of State for Energy. Norman Tebbit, razor sharp in tongue and mind, replaced Prior. The most surprising promotion was that of Cecil Parkinson. Although almost invisible to the watchers of political form because he travelled so much as a junior trade minister, he had caught Margaret Thatcher’s eye by his charm, competence and good looks. He replaced Peter Thorneycroft as Chairman of the Party and was given the right to attend the cabinet as Paymaster General.
Other ministers who were moved included Patrick Jenkin to Industry, Norman Fowler to the Department of Health and Social Security, and David Howell – a demotion – to Transport. Baroness Young replaced Soames as Leader of the House of Lords. She was the only woman ever appointed to the cabinet by Margaret Thatcher, but she lasted a mere twenty months. Promoting women ministers never came high on the Prime Minister’s agenda.
This reshuffle reduced Margaret Thatcher’s vulnerability to rebellion from her own senior colleagues. She still did not have a majority of ‘true believers’ in her own cabinet. But she had said in the past, ‘Give me six strong men and true, and I will get through’.50 Now at last she had them.
Even though she had buttressed her position against internal revolts like the one that temporarily destabilised her grip on 23 July, external pressures were continuing to take their toll. By the turn of the year, interest rates surged back to 16 per cent and unemployment climbed above three million. On 26 January 1982, the day when this symbolically dreadful figure was announced, Margaret Thatcher had to face Prime Minister’s Questions in a House of Commons she knew would erupt with hostility towards her.
She made her final preparations for the ordeal with her Economic Affairs Private Secretary, Michael Scholar. He was no Thatcherite politically, but on this occasion his civil servant’s neutrality soared to the highest realms of admiration. He recalled:
As we sat there in her room at the House with the clock ticking towards 3.15, I could feel the heat coming from her body. I saw that she was perspiring. And I thought: ‘By God, this woman is brave. How I admire her courage to go out and face what will be a howling mob.’ I knew the w
orry she felt about the continuous rise, rise, rise in the unemployment figures. But she held her nerve.51
Strong nerves were required in the country as well as in the Commons when the opinion polls declared Margaret Thatcher to be the most unpopular Prime Minister in living memory, with a rating of 25 per cent. Appalling by-election results were also deepening the Tory gloom. The Liberals won North West Croydon with a swing of 24 per cent. Shirley Williams overturned a Conservative majority of 18,000 to capture the blue-chip seat of Crosby in Lancashire for the SDP. The sudden emergence of third-party politics was complicating the mid-term picture. The prospects of the government holding on to power at the next election with an overall majority looked bleak. The received wisdom in Westminster, Whitehall and Fleet Street was that Margaret Thatcher would be a one-term prime minister.
REFLECTION
The year of 1981 was Margaret Thatcher’s darkest hour. Her economic strategy appeared to be failing. Her authority over her cabinet was crumbling. Her man-management of her colleagues was as dreadful as the blockbuster memorandum had portrayed it. The words ‘An unhappy ship’ were inadequate to describe the plummeting morale within the government.
Although she was shaken by the storm clouds that surrounded her, the Prime Minister did not lose her self-belief or her capacity for decisive action. The cabinet reshuffle of September 1981 was a major turning point in her leadership. It had two dimensions: sending out signals that she was sticking to a revolution in economics and starting a revolution of political attitudes.
The economic revolution was already starting to work by the spring of 1982, as the fruits of the 1981 Budget began to appear. The figures for GDP growth, productivity and lower inflation began to move in the right direction. Although unemployment remained stubbornly high, it was in fact peaking. Moreover, the country seemed more resilient than the cabinet in its attitudes towards the deep-seated problems that Margaret Thatcher was determined to solve.
These changing attitudes were reflected in the September 1981 reshuffle. Grandees, wets, and the ‘softly, softly’ approach to the unions were purged. Self-made men, hard-liners and tougher approaches were in the ascendant. It became clear that the Prime Minister had gained control of her cabinet. By her own certainty and by the lack of a coherent plan B, she managed to win a grudging national acceptance that there really was no alternative. TINA was alive and flourishing, even if far from secure in electoral expectations. That security was to come via the totally unexpected route of the South Atlantic.
________________
* Standing Commission on Pay Comparability, 1979–1980, set up by James Callaghan to settle the ‘winter of discontent’ pay disputes and chaired by Hugh Clegg, Professor of Industrial Relations at Warwick University.
† Brian Griffiths (1941–), Professor of Banking and International Finance, City University, 1977; Head of Prime Minister’s Policy Unit, 1985–1990; created Lord Griffiths of Fforestfach, 1991.
‡ See Chapter 26, ‘Unions and miners’.
19
The Falklands War I
The prelude
SABOTAGING THE LEASEBACK OPTION
Three weeks after becoming Prime Minister, Margaret Thatcher invited her two most senior cabinet colleagues and their wives to Sunday lunch at Chequers. This was intended to be a celebratory occasion in the afterglow of election victory. It began in that spirit, for it would be difficult not to enjoy the company of four such agreeable guests as Willie and Celia Whitelaw, and Peter and Iona Carrington, with Denis mixing the pre-lunch gin and tonics.
Despite the good intentions of those present, the occasion passed into legend as the ‘thermonuclear lunch’.1 The trigger for the explosion was the subject of the Falkland Islands as raised by the Foreign Secretary.
While eating the first course, Lord Carrington, in his languid style of conversation, observed that one of the problems sitting on his desk was what to do about the Falklands. ‘I think we will soon be in trouble if we go on having meetings about them with the Argentines without saying anything at all’, he said. ‘One of the options which seems to me worth exploring is a leaseback arrangement similar to what we have in Hong Kong.’2
The Prime Minister was not merely opposed to such a suggestion. She was appalled by it. She erupted in anger, and spent the next ten minutes denouncing the very idea of exploring a Hong Kong solution for the Falklands. ‘I remember her shouting, “That’s the trouble with your Foreign Office. Everyone in it is so bloody wet!” ’ Carrington recalled. ‘And it got worse. She banged on the table, and went on and on and how typical it was of me and the F.O. “to want to give away Britain’s possessions”.’
With the eyes of Lady Carrington and Mrs Whitelaw rolling in astonishment at this performance, it was Denis who cooled the temperature by saying to his wife: ‘I think you’re being a little extravagant, my dear.’3
Despite this ‘thermonuclear’ attack at Chequers, Carrington persisted in his efforts to find a way round the Prime Minister’s objections. He wrote to her formally on 20 September 1979 saying that a form of leaseback was the best solution to the Falklands. She scribbled on the top of his letter, ‘I cannot possibly agree to the line the Foreign Secretary is proposing’.4
Undeflected by this further rebuff, Carrington returned to the leaseback option at two later meetings of the Overseas and Defence committee of the cabinet in October 1979 and March 1980. Margaret Thatcher eventually gave some ground to the extent of allowing the Foreign Office to begin exploratory discussions with Argentina. Carrington allocated responsibility for this initiative to his Minister of State, Nicholas Ridley, who was believed to be a kindred spirit of the Prime Minister’s. She had spoken of him as ‘one of us’ in her opposition days after finding herself in agreement with the free-market views he expressed at meetings of the Economic Dining Club.
Having established this good rapport with his leader, Nicholas Ridley was disappointed not to have been made a Treasury minister. But Margaret Thatcher sugared the pill by telling him that she needed ‘one sound man’ in a department she regarded as notoriously weak.5 She also told him that she mistrusted Carrington’s economic views and needed an ally ‘to keep him on the straight and narrow’. This amused the Foreign Secretary:
She had no idea what my views were on economics. They were practically non-existent! Also, she didn’t realise that in those days the F.O. hardly ever discussed economics. So, poor old Nick had nothing much to do until I asked him to take charge of the Falklands.6
For Ridley, this was a poisoned chalice. Notoriously tactless in domestic politics, he showed similar lack of finesse on his first foray into international diplomacy. He was too blunt with the Falkland Islanders telling them with a hint of menace that they must ‘take the consequences’ of being unwilling to make a deal on sovereignty.7 He was prematurely accommodating to the Argentines, provisionally agreeing a ninety-nine-year leaseback agreement with their Deputy Foreign Minister, Commodore Carlos Cavandoli, at secret talks with him in New York and Geneva.
When he reported this deal back to the OD committee, the Prime Minister was suspicious and nervous. She was recorded by the Cabinet Secretary as saying, ‘My fear is an awful row from our backbenches’.8 Regrettably she helped to turn her fear into a reality. For when Nicholas Ridley declared his negotiating hand in a statement to the House of Commons on 2 December 1980, he could never have guessed that the fierce opposition to his proposals had been orchestrated not only by the Falkland Islanders but also by the Prime Minister’s Parliamentary Private Secretary.
Ian Gow mounted a discreet operation. ‘Are you sound on the Falklands, Jonathan?’ he asked me the day before Ridley’s statement. Like most back-benchers, I did not realise there was an issue on this obscure colony to be sound or unsound about. ‘Then I suggest you have a word with Amery’, said Ian with a knowing twinkle. ‘He knows the score.’9
Julian Amery, a former Foreign Office minister and son of Winston Churchill’s Colonial Secretary, Leo Amery, was
one of the last bastions of the imperial mindset surviving in the House of Commons of the 1980s. His inside information about the Falklands was interesting, as he was well briefed on the recent deliberations of the OD Committee of the cabinet. According to Amery’s account, Nicholas Ridley had presented his Falklands leaseback proposal to OD and had narrowly got it through, thanks to support from Lord Carrington and the Defence Secretary, Francis Pym. However, the Prime Minister had strong reservations. Although expressing them forcefully, she had only managed to insist that any final decision must be subject to the consent of the Islanders, whose wishes must be ‘paramount’.10 This was a blocking card equivalent to the ace of trumps. Even so, she remained anxious. So she asked her Parliamentary Private Secretary to approach Julian Amery and other like-minded colleagues to make sure that the Islanders’ views were well represented when Nicholas Ridley made his statement to the House.
Ian Gow did his job well. Fortified by this nudging from No. 10, Julian Amery organised one faction of the parliamentary revolt against Ridley’s plan. Other factions were put on full alert by the Falkland Islands’ lobbying office in London, which had supporters in all parties at Westminster. The result was that when Nicholas Ridley made his statement he was savaged by an ambush led by angry Tories such as Julian Amery, Sir Bernard Braine, Peter Tapsell and Viscount Cranborne. They were backed by senior opposition Privy Councillors Douglas Jay and Peter Shore (Labour), Russell Johnston (Liberal) and Donald Stewart, the leader of the Scottish Nationalist Party. All of them vigorously opposed the government’s policy.
Sitting in the House that afternoon, I had never before seen such a mauling of a minister. The noise levels of hostile barracking were at full volume. Nicholas Ridley did not help his case by using a sarcastic tone when soft answers might have turned away wrath. But his pitch had been queered. Not a single government back-bencher had been encouraged by the whips to support him, and several had been briefed to attack him. At the end of thirty minutes worth of virulent questioning of his statement amidst repeated appeals for ‘Order!’ from the Speaker, leaseback was well and truly sunk.
Margaret Thatcher: Power and Personality Page 41
